Don urges CBN to eliminate dual exchange rates

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CBN building
United Bank for Africa

Dr Chijioke Mgbame of the Department of Accountancy, University of Benin has urged the Central Bank of Nigeria (CBN) to eliminate the dual official exchange rates prevalent in the foreign exchange market.

Mgbame, who said this in an interview with Newsverge on Monday in Lagos said that no economy in the world operates a dual official exchange rate in their currency market.

He was reacting to the gains made by the new FOREX policy and the need to sustain it.

Mgbame said that the positive response of the Naira to the new policy was “natural from a market characterised by artificial and natural factors.’’

According to him, the CBN should strictly exercise its oversight functions on Deposit Money Banks (DMBs) to halt the buying of FOREX at official price and selling it at a higher rate at the parallel market.

“The CBN should finally eliminate the dual rate prevalent at the FOREX market.

“No economy on the world operates a dual exchange rate and makes progress.

“The CBN should adopt measures to checkmate round-tripping among commercial banks,’’ Mgbame said.

Mgbame explained that it was pertinent for the apex bank to boost liquidity in the FOREX market to sustain the gains already recorded by the FOREX policy.

Newsverge reports that since the CBN rolled out its new FOREX policy a week ago, the Naira had continued to firm against the dollar in the entire major segments of the market.

The dollar continued to crash at the parallel market as currency speculators continues to count huge losses to the new policy.

Prior to the implementation of the policy, the image and the integrity of the Naira had been battered almost beyond salvaging.

The Naira started firming from a pitiable N520 to a dollar to N505, N495 and finally N460 to a dollar.